Oil rose nearly $3 to above $100 today on expectations that a comprehensive US government plan would help battered financial markets.
The US government launched several multibillion-dollar programmes to guarantee holdings in money-market mutual funds and curb short-selling while developing a broader plan to mop up toxic mortgage debt.
News of the plan sent global financial markets higher and helped push up US crude up $2.74 to $100.62 a barrel this evening, after touching a session high of $103.64. Prices have rebounded from a seven-month low of $90.51 a barrel on Wednesday.
London Brent crude gained $2.66 to trade at $97.85 a barrel.
Flagging oil demand in the US and other consumer countries amid high fuel costs and the credit crisis, has sent crude tumbling from a record high of over $147, hit in July.
Investors who flocked to commodities as a hedge against inflation and the weak dollar have been pulling out of oil, putting additional pressure on prices.
Continued concern over supply from the US and Nigeria also supported crude. Some 93% of oil production in the US Gulf of Mexico - the source of one-quarter of the US' crude output - remained idled on Thursday in the wake of Hurricane Ike, along with about 14% of the country's refined fuel capacity.
Meanwhile, militants in OPEC member Nigeria said they had attacked another oil pipeline in the Niger Delta. The Movement for the Emancipation of the Niger Delta (MEND), which has declared an 'oil war' against the oil sector and the military, said it used explosives to sabotage a Royal Dutch Shell-operated pipeline at the Cawthorne Channel in Rivers state.
